WASHINGTON – December 11, 2014 – (RealEstateRama) — Rep. Keith Ellison (D-MN) released the following statement today after the Federal Housing Finance Agency (FHFA) announced it will fund the Housing Trust Fund and the Capital Magnet Fund.
“I am thrilled by the decision of the Federal Housing Finance Agency to implement the Housing and Economic Recovery Act of 2008 and provide about $500 million a year or more to create affordable rental housing for thousands of extremely low-income families,” Rep. Ellison said. “We currently have a shortage of 8 million units affordable for extremely low-income families. The Housing Trust Fund and the Capital Magnet Fund make major progress toward meeting this need. These will provide desperately needed revenue to offset recent spending cuts and the sequester that have left long wait lists for affordable housing in communities across the nation.”
“FHFA Director Mel Watt and his team are to be commended for providing good news to the millions of families with uncertain housing and the tens of millions living in high-poverty neighborhoods,” Rep. Ellison said.
“The FHFA’s decision to release funds to the NHTF is a major achievement for Congressman Ellison, housing advocates, developers and providers,” Chip Halbach, Executive Director of Minnesota Housing Partnership, said. “With this funding, many homeless families and families in jeopardy of experiencing homelessness will be able to secure housing that is affordable to them. This is a day worth celebrating.”
“Funding for the National Housing Trust Fund and Capital Magnet Fund are critical elements in the nation’s effort to rebuild housing opportunities in communities that suffered the most in the recent housing crisis,” Frank Altman, President and CEO Community Reinvestment Fund, USA, said. “Many families are still struggling to obtain decent affordable housing, and we at Community Reinvestment Fund applaud the FHFA for its decision to capitalize the National Housing Trust Fund.”
Rep. Ellison previously led a letter signed in July by 78 House Democrats urging funding of the Housing Trust Fund and the Capital Magnet Fund.
The Funds receive a transfer of funds by Fannie Mae and Freddie Mac based on their new business. This dedicated source of revenue enables the Housing Trust Fund to provide communities with funds to build, preserve, and rehabilitate rental homes that are affordable to families with incomes below about 30 percent of area median income — about $24,000 in Minneapolis. The funds could be used for the real costs of building and managing affordable developments such as loans, equity investments, grants, interest rate subsidies, real property acquisition, site improvements, demolition, financing, operating costs to offset the low rents and reasonable administrative costs.
The Capital Magnet Fund (CMF) awards grants to nonprofit housing organizations and community development financial institutions to develop affordable housing, economic development and community service projects. Before the previous FHFA Director suspended contributions, the CMF received $80 million which leveraged more than $1 billion in investments. Minnesota CDFIs such as Community Reinvestment Fund or Volunteers of America could receive investment funds to strengthen local economies.